February 25, 2010

D.C. Court of Appeals to Consider Consumer Protection Law En Banc

The D.C. Court of Appeals today granted an en banc hearing to consider a key question about Washington’s local consumer protection law: Exactly who can use it to bring a lawsuit?

Lawyers for AOL and several major telephone companies are attempting to reverse two recent rulings by the court, in which it concluded that the D.C. Consumer Protection Procedures Act allows individuals to act as private attorneys general and sue corporations on behalf of the public interest, whether or not they themselves have been injured.

In September, a unanimous three-judge panel ruled in Grayson v. AT&T that U.S House Rep. Alan Grayson (D-Fla.) could continue to pursue a lawsuit arguing that phone companies were illegally holding onto unused balances from pre-paid phone cards, rather than handing the money over to the District. Grayson, represented by Frederick Cooke Jr. of Washington’s Rubin, Winston, Diercks, Harris & Cooke, filed the suit as a plaintiff in 2002 while living in Florida. In a footnote, the court said it wasn’t bound by the standing requirements for Article III federal courts.

In November, another unanimous three-judge panel used the same reasoning to uphold a lawsuit against AOL, in which it was accused of misleading existing users into paying higher rates for their service than new customers. Rubin Winston partners Jeffrey Harris and Walter Diercks represented the plaintiffs in that suit.

In their petition for rehearing, AOL’s lawyers from McGuireWoods, including partner John Wilburn, argued that by allowing “private attorneys general” to bring consumer protection suits, the appeals court was inviting a flood of litigation. “Simply stated, there is too much at stake for the D.C. courts to permit a poorly-analyzed footnote…to completely overhaul modern jurisdictional law,” the defense lawyers wrote.

Of the six judges who signed onto the two decisions, five will sit on the nine-judge en banc panel, meaning a majority have already ruled in favor of the plaintiffs (the sixth judge had senior status). Whether one of the judges is reconsidering his or her stance, or the court intends to deliver a more authoritative reading of the law, remains to be seen.

Today’s order also granted the D.C. Attorney General’s Office permission to participate in the case as an amicus curiae. The District filed its own suit against AT&T in January.